Financial year 2018 ('FY18') was another successful year for the sustainable, future growth of the ERM business, with strong overall performance
The oil price and commodity prices generally picked up during FY18, particularly in the second half of the year (“H2”). The oil price increased from $53/bbl at the start of the financial year to $69/bbl at the end of FY18. This was supported by a more politically stable and more economically robust global background. Accordingly, client capex and opex in the resources sectors, and other dependent sectors such as chemicals, started to be more positive during H2. Sales in the Upstream segment of the Oil & Gas sector, as well as Mining and Chemical sectors, increased during FY18, with a consequent increase in backlog.
At constant exchange rates, our net consulting revenue increased by 4% during FY18 and our trading profit increased by 5%. We continued to maintain significant investment for medium-term growth in key areas, including growth sectors like Chemical, Oil & Gas and TMT (Technology Media & Telecommunications), and for the development of our client-focused service offerings, as well as our strategic imperatives. Our trading profit margin for FY18 was 15.2%, compared to 14.9% for financial year 2017 ("FY17"). We generated strong operating cash flow of $121m (before tax payments) during FY18. After deducting payments for tax, investing and financing activities, there was a net $13m increase in cash. We held $166m of cash at 31 March 2018.
Full-time equivalent (“FTE”) employees declined by 165 during FY17 as we responded to the challenging market conditions. As outlined above, the market improved during FY18 and we were able to increase our FTEs, especially in H2, as a result of the increase in backlog. FTEs grew by 49 in the first half of FY18 (“H1”) and 163 in H2, plus a further 104 via our acquisitions (see below). We ended the year at 4,605 FTEs, with FTEs in our organic business back in line with the start of FY17. The average number of FTEs increased from 4,341 in FY17 to 4,403 in FY18.
For the first time since the global financial crisis, all major regions of the world are experiencing an uptick in economic growth. There is some caution amid tariff threats to global trade with a consequent knock on impact on the wider global economy. In addition, there is increased political uncertainty due to deterioration in relations between the West and Russia, the continuing Brexit negotiations and the peace process in the Middle East. Absent these downside risks, we believe that our major sectors will continue to experience growth with strong opportunities for ERM.
We will continue to invest in our strategy to take advantage of improving economic conditions and growth in our key markets. The financial results for FY18 represent a strong overall performance given the level of investment made during the year and the continued tough market conditions in H1. The build-up in our backlog and growth in our FTEs augurs well for financial year 2019.
Partners in ERM are our senior management level leaders. During FY18 we hired 45 new Partners and promoted 14 Partners internally from our newly launched Path to Partnership program. In addition we welcomed 12 Partners via our acquisitions (see below), to end the year at 560 Partners.
We continued to make strategic in-fill acquisitions. In June 2017, we acquired the 80-person Pacific Environment Consulting business of EnviroSuite Limited, an Australian listed company. In January 2018, we acquired Michael Pisani & Associates, Inc, an environmental consultancy focused on clients on the U.S. Gulf Coast providing contaminated site management and litigation support. In February 2018, we acquired BrownFlynn Ltd, a U.S. corporate sustainability and governance consulting business based in Cleveland, Ohio.
Our marketplace continues to grow and offer the Group considerable opportunities. We continue with our strategy, which is to grow and build our presence in major markets, through organic growth and targeting specific acquisitions where appropriate to broaden our geographic and service offerings. Our global expansion focuses on building expanded relationships with our clients and servicing their needs in more regions and across more service areas.
In summary, FY18 was another successful year for the sustainable, future growth of the ERM business.